Media Release: Mineral Commodities Ltd AGM on 25 May 2016: Why SA and Australian organisations are calling for shareholder and regulatory action
19 May 2016 at 10:59 am
Cape Town, South Africa. Next week, a broad coalition of community and civil society organisations in South Africa and Australia will stage protests against Mineral Commodities Ltd (MRC) to coincide with the company’s annual general meeting in Perth on 25 May 2016. The protests will focus attention on the social, environmental and governance record of MRC’s subsidiaries operating in South Africa, and will call on shareholders and regulators in both countries to hold MRC management to account and to put an end to the devastating social and environmental impacts of the company’s local activities.
MRC is an Australian listed mining company with various subsidiaries in South Africa. MRC subsidiary Mineral Sands Resources (Pty) Ltd operates the Tormin mineral sand mining operation on South Africa’s West Coast, which it intends to expand substantially along further pristine stretches of the coastline and along the sensitive and legally protected Olifants River Estuary. In the Wild Coast in the Eastern Cape Province of South Africa, MRC subsidiary Transworld Energy and Mineral Resources (SA) (Pty) Ltd has applied for a mining right to mine titanium from the sand dunes of Xolobeni. This endeavour has already resulted in over a decade of well-documented violent social upheaval in the area, and has been the subject of ongoing legal challenges.
There is a great deal of controversy surrounding the operations and planned operations of MRC and its subsidiaries, as well as their associated black economic empowerment companies Blue Bantry Investments 255 (Pty) Ltd and Xolobeni Empowerment Company (Xolco). In particular, employees, affected communities and NGOs have alleged bribery, harassment, threats, violence and breaches of environmental, mining and labour laws.
The vast majority of residents in the Xolobeni area have for many years opposed the proposed mine. The Amadiba Crisis Committee (ACC) was formed to represent their interests. There have been a number of acts of violence against ACC members and supporters, culminating in the assassination of the chairman of the ACC, Sikhosiphi ”Bazooka” Rhadebe on 22 March 2016. Shortly before the killing, Rhadebe had been told that his name and the names of the other leaders of the ACC were on a “hit list”. Rhadebe was shot in the head in front of his young son. Two months later, no arrests have been made for his murder. In an interview on South African talk radio on 7 April 2016, MRC chief executive officer Mark Caruso suggested that the killing was an incidence of South Africa’s high crime rate. However, the intention of the killing was clearly assassination, not robbery or any other crime, and is far more likely to be related to Rhadebe’s very vocal opposition to mining in the area.
The South African government has thus far taken no meaningful steps to ensure the safety of anti-mining activists at Xolobeni, or to investigate complaints submitted to authorities about breaches of environmental, mining and labour laws at the very profitable Tormin mine. It is only in the past week that the Minister of Environmental Affairs has confirmed that the national Department of Environmental Affairs, in consultation with the Department of Mineral Resources, would investigate allegations of adverse impacts on the coastal environment being caused by Mineral Sand Resources (Pty) Ltd at the Tormin mine.
MRC’s biggest shareholders either manage the company themselves, and are therefore implicated in the allegations against its subsidiaries, or appear impervious to pleas from around the world to intervene to put a stop to the devastation being wrought by MRC’s subsidiaries in South Africa. In the hope, however, that there are shareholders of this company who do consider that repeated breaches of human rights are to be condemned and further breaches avoided, here are some of the hard questions MRC’s management should be answering at the AGM to be held in Perth on 25 May 2016:
- Why was Chief Lunga Baleni, Chief of the Amadiba tribe resident in the area, made a director of Transworld Energy and Mineral Resources, the company applying for a mining right at Xolobeni, in September 2015? What remuneration has he received, and will he receive in future, for this appointment? What expertise or experience, if any, is he bringing to the proposed mining operation?
- Why is Guy Redvers Walker a “Senior Independent Non-Executive Director” of MRC, when he is also the Company Secretary for AU Mining Limited, MRC’s biggest shareholder, and accordingly not independent at all?
- Why has the South African Minister of Environmental Affairs instructed her Department to institute an investigation into adverse impacts on the coastal environment being caused by Mineral Sand Resources (Pty) Ltd at the Tormin mine? What are the legal consequences if violations are confirmed?
- BEE company Blue Bantry Investments 255 owns 50% of Mineral Sands Resources (Pty) Ltd, which operates the Tormin mine. MRC has made substantial loans to Blue Bantry since Blue Bantry’s incorporation. What were the funds used for? And why is Blue Bantry’s status on the South African Companies and Intellectual Property Commission’s database listed as being in the process of deregistration due to annual return non-compliance?
- What is management’s response to allegations that management at the Tormin mine has made salary increases contingent on workers’ agreement that they will not join a trade union, when the right to do so is protected in South Africa’s Constitution?
- On what basis does management consider it ethically defensible to pursue its application for a mining right at Xolobeni, given the local disputes, violence and human rights violations caused directly and indirectly by this application?
The communities affected by the operations of MRC in South Africa deserve answers to the questions above, and no doubt have many more of their own questions for MRC and its shareholders.
The social and environmental upheaval caused by MRC’s operations in South Africa illustrate the devastating conflict that is the inevitable outcome when the regulatory system that governs natural resource extraction refuses to recognise the rights of affected communities.
South Africa’s regulators have undoubtedly failed these communities, and there are many efforts underway to compel them to take action. Such regulatory failure is not, however, an excuse for companies operating or trying to operate within South African borders to flout the law and to violate human rights. It is now time for the company’s shareholders, and the Australian regulators, to play their part.
Queries: Tracey Davies, Head: Corporate Accountability & Transparency, +27 21 447 1647 [email protected]
About the Centre for Environmental Rights (CER)
The CER is a non-profit organisation and an environmental rights law clinic that helps communities defend their right to a healthy environment. We do this by advocating and litigating for transparency, accountability and compliance with environmental laws. For more information, visit http://cer.org.za/.
The Umgungundlovu Traditional Authority and the ACC are represented by Richard Spoor Inc. in Johannesburg and LRC in Cape Town and Pietermaritzburg. For legal issues in the coastal Amadiba community struggle against mining: Henk Smith , Thabiso Mbhense and Richard Spoor .
 While a mining right was awarded in 2008, this right was suspended four months later and withdrawn in 2011 after residents lodged an appeal. A new application for a mining right was filed by MRC’s local subsidiary with the Department of Mineral Resources on 3 March 2015. Copies of the mining right application were not made available for public comment, and members of the Umgungundlovu community were forced to approach the High Court for an order interdicting the Minister of Mineral Resources from awarding the mining right until copies of the application had been made available to the community for consultation. Redacted copies of the application have only recently been made available. The Umgungundlovu Traditional Authority and the Amadiba Crisis Committee are represented by Richard Spoor Inc. in Johannesburg and the Legal Resources Centre in Cape Town and Pietermaritzburg.
 http://www.groundup.org.za/article/strike-west-coast-sand-mine-turns-nasty_3336/; http://www.groundup.org.za/article/west-coast-mine-boss-must-go-say-staff_3479/; http://www.groundup.org.za/article/state-accused-letting-tormin-damage-west-coast_3595/; http://www.groundup.org.za/article/west-coast-mine-workers-court_3377/; http://www.groundup.org.za/article/court-case-exposes-violence-wild-coast-mining-dispute/.
 The fact that the directors of MRC and its subsidiaries have thus far not been held to account for this upheaval illustrates the extent of the impunity with which many Australian mining companies operate in Africa, a phenomenon exhaustively investigated by the International Consortium of Investigative Journalists in its 2015 report, Fatal Extraction: Australian Mining’s Damaging Push into Africa